June 20, 2018
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Undoing an outdated deal

If you had to name one institution that epitomizes President Franklin D. Roosevelt’s New Deal, it might be the Tennessee Valley Authority. Created by Congress in 1933, this immense federal electric-utility-cum-water-project owns 29 hydropower plants, 11 coal plants and three nuclear plants, which serve 9 million customers in seven states from Virginia to Mississippi. Throughout much of its life, conservative Republicans condemned the TVA as socialist excess. In 1964, GOP presidential candidate Barry Goldwater ran on a platform that included privatizing the TVA.

Times have changed.

Today, President Barack Obama, arguably the biggest proponent of activist government to occupy the White House since Lyndon B. Johnson beat Goldwater, is entertaining TVA privatization. His fiscal 2014 budget notes that “[r]educing or eliminating the Federal Government’s role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path.”

The chilliest responses to Obama’s idea came from Republican lawmakers who represent Southeastern states that enjoy lower-than-average electricity rates, thanks to the TVA.

The political irony is delicious: A Democrat plays against ideological type, at the short-term expense of red states that didn’t vote for him anyway; ostensibly free-market Republicans scramble to explain why this particular behemoth should stay in Uncle Sam’s portfolio.

But there are real policy issues here, and it’s time Washington addressed them. As Obama’s budget argues, the TVA has long since accomplished its original purposes of economic development and rural electrification. Nowadays, the cheap power the TVA provides may help Southern states compete with others for business investment, but it’s unclear why that’s a legitimate federal goal.

The president is right to at least consider a new arrangement that might bring private capital and greater efficiency to this 80-year-old entity. It’s worse than hypocritical for Republicans to stand in the way.

The Washington Post (April 26)

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